Agreement spreads payments over three years and eliminates future interest, saving millions for ratepayers
WORCESTER, Mass. — The City of Worcester has reached a $35.5 million settlement agreement with the Town of Holden, resolving a long-running legal dispute over sewer use rates, city officials announced Wednesday.
City Manager Eric Batista said the agreement, reached with the support of the Worcester City Council, settles the case involving Holden, the Department of Conservation and Recreation, and the City of Worcester.
Under the terms of the settlement, Worcester will pay Holden a total of $35.5 million over three years. The payment schedule includes an initial $10 million payment by April 1, 2026, funded from the city’s sewer reserves, followed by $10.5 million due on July 1, 2026. Beginning July 1, 2027, the city will make three annual payments of $5 million.
As part of the agreement, Holden will forgive interest accrued after February 2026 and will not charge additional interest as long as payments are made on schedule. City officials said this provision will save Worcester approximately $4.5 million in potential interest costs.
Batista described the case as a complex and lengthy legal matter, noting that the city pursued all available legal options before agreeing to the settlement. He said the negotiated terms were designed to minimize the financial burden on local residents by spreading out payments and eliminating future interest.
The city manager added that a detailed report outlining the impact of the settlement on ratepayers will be presented to the City Council in the coming weeks. He also indicated that Worcester plans to work with state officials and neighboring communities to negotiate a new sewer use rate agreement moving forward.
The settlement brings closure to a dispute that has had significant financial implications for both municipalities and sets the stage for future regional cooperation on wastewater infrastructure and costs.
